“Beware of reaching for yield!” That’s been the time-tested advice from every prudent financial adviser since 2009, when central bankers in search of stimulus pushed interest rates to their lowest levels in recorded history.

Low rates boost the temptation for even conservative investors to buy riskier assets offering higher yields, a wager that eventually reminds most why they were conservative in the first place.

Of course, ancient wisdom also teaches that those who tumble out of trees must first decide that letting go of the trunk is a good idea.

This brings us to Sempra Energy, which last week agreed to pay $9.45 billion for control (an indirect 80 percent stake) of Oncor, which had $7 billion in debt on its books. Sempra is the sprawling owner of San Diego Gas & Electric, other utilities and unregulated energy assets. Oncor is an electric utility that serves Dallas and other fast-growing cities in Texas.

If the deal is approved by Texas regulators, Sempra will have outbid Berkshire Hathaway’s Warren Buffett, who thought the utility stake was worth just $9 billion.

It’s the biggest deal for Sempra since the company was formed in 1998 by the merger of SDG&E and Southern California Gas. At first glance, the Oncor deal appears to reach for yield in the wrong direction.

For example, California’s regulators allow Sempra to earn a slightly higher 10.2 percent on its equity invested in SDG&E, while Texas allows a 9.8 percent return on Oncor’s equity. And California lets SDG&E bill ratepayers for considerably higher ratios of equity to debt than Texas, which favors financing that lowers costs to consumers.

For perspective, anything near 10 percent looks like a pot of gold next to the 0.1 percent ordinary investors earn these days in a money-market account, which arguably bears the same kind of super-low default risk that state-regulated utilities enjoy on their power lines and other assets.

Yet the real return on an income-producing asset depends on its purchase price. Sempra is paying 23 times the forecast 2018 net income for Oncor, said executives in a Friday call with analysts. Put another way, Sempra is willing to wait 23 years to recover its initial investment at this year’s rate of overall earnings.

That’s a hefty premium for a slow-growing utility asset, and it’s richer than Sempra itself, which investors valued at roughly 21 times forecast 2018 earnings at Friday’s market close.

Indeed, Sempra executives said they will forego a stock repurchase “placeholder” for 2019 in order to finance the Oncor deal. So Sempra’s shareholders will pay a higher price to buy into a Texas utility than they might have paid to increase their ownership stakes in their own company.

Adding injury to insult, Sempra plans to issue about $2 billion in new equity to finance the deal, diluting existing shareholders.

So why would a company pay a premium to buy lower profitability and growth? In a word; leverage.

Although Sempra plans to recruit an equity partner, it also plans to borrow heavily to do this deal, by selling $3 billion in investment grade bonds that will reside outside the Texas utility in a holding company, plus $1.5 billion or so in debt owed directly by Sempra. Then there’s the $9.35 billion in debt on Oncor’s books that comes with the company. And executives expect Oncor to plow $7.5 billion into capital projects over the next five years, almost surely funded with debt along with retained earnings, and perhaps contributions from the mother ship.

As any business owner knows, leverage can be a wonderful thing, as the magic of somebody else’s money turns a dollar of equity into several dollars of earnings.

But somebody else generally wants an interest payment. And when a bad economy cuts earnings, those payments can cause bleeding.

On the bright side, consumers like their air conditioning even when the economy tanks. Oncor is a “wires” company, with steady earnings from transmission and distribution. So it’s protected from the competitive forces in Texas, which deregulated its power generating sector.

There is a school of thought in modern finance that says adding leverage to a low-risk investment can produce superior performance than putting cash into a higher-risk one, if you play your cards right.

Indeed, Sempra Chief Executive Debra Reed said the Oncor deal will allow the company to shift capital into lower-risk opportunities compared to its other, unregulated business units where growth has been stronger.

Meanwhile, the Texas economy has been more robust than California’s for years. SDG&E already has grown its lucrative asset base by several billion dollars to profit from California’s rush to solar energy, but aversion to fossil fuels is boosting the political risks at its Southern California Gas subsidiary. Texas is a better bet for growth.

And Sempra has a long history of outstanding management of political, regulatory and financial risk.

When California launched its botched electricity deregulation in the late 1990s, Sempra quickly formed an unregulated parent and sold off the power plants owned by SDG&E in Carlsbad and Chula Vista. The move opened a legal safety hatch that allowed the utility to pass along generating costs directly to consumers, insulating the SDG&E from insolvency that hit other utilities after power prices soared in 2000.

Then Sempra’s unregulated side negotiated lucrative, long-term power supply deals with California’s governor that sharply reduced its risk of building generators and trading energy.

This pattern of lobbying and regulatory skill, coupled with extensive hedging, became ingrained in Sempra’s culture.

As the company worked to permit a natural gas importing plant in Mexico, it waited to build until buyers had signed long-term contracts that protected the company a few years later when prices crashed and the import market dried up. When Sempra proposed a gas export plant in Louisiana, it again hedged its risk onto customers while it lobbied for government approvals.

Only time will tell if the Oncor deal represents a major shift toward greater risk-taking for Sempra. Some investors are comforted that the $9.45 billion price tag is relatively close to the $9 billion offered by Berkshire, whose CEO famously refuses to engage in bidding wars.

However, Debra Reed is no Warren Buffett. Berkshire holds about $100 billion in cash, while Sempra held $223 million at last report.

All things equal, paying cash allows lower operating costs and higher profits, because there are no interest payments. More to the point, cash comes in handy when things go wrong.

Reed is taking more risk than Buffett, a consideration that may weigh heavily on Texas regulators who must approve this deal.

Correction: An earlier version of this column misstated a debit component: Sempra plans, with partners, to indirectly buy 80 percent of Oncor, which has $7 billion in debt on its books. In addition, Sempra’s stock price Friday was about 21 times the consensus forecast of 2018 earnings. And finally, executives told analysts they had a “placeholder” to repurchase shares in 2019 if the company couldn’t find a superior investment, and not a “plan,” as an earlier version of this column said.

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